21 Jun DISCUSS HOW PENELOPE, MARK AND JOHN WILL CALCULATE THEIR “BASIS” IN THE NEW ENTITY.
After 20+ years of working for other firms, three professionals are considering combining forces and establishing their own practice. The three professionals are Penelope (enrolled agent, age 41), Mark (CPA, age 43), and John (CVA, age 65). Penelope specializes in taxes, Mark is an auditor, and John is a business valuation expert.
There are various options available regarding entity selection for the new business venture. The appropriate business entity for any individual(s) will depend on their particular facts and circumstances.
You are a valued colleague and friend of this trio, and they have come to you seeking advice as to how to structure their new business. Please consider the following tax and nontax issues as you recommend an entity choice to Penelope, Mark and John.
Research and describe the main characteristics of the various forms of organization (i.e., entity) that are available to Penelope, Mark, and John.
Become familiar with the tax implications of choosing one form of organization over another.
Make your recommendation as to what form of organization (choosing only one) you believe will be most beneficial for the group from a tax standpoint. Be sure to explain the reasoning for your choice. Once your choice is made, discuss the various tax implications to the entity and to the three individuals, as follow.
Discuss the tax consequences of contributing cash, property, and/or services to the new entity (discuss only for the entity you have recommended).
Discuss, in detail, how this entity is taxed (if at all) and what filing requirements it has with the IRS (discuss only for the entity you have recommended).
Discuss how income and distributions may or will be allocated to Penelope, Mark, and John (discuss only for the entity you have recommended).
Discuss, in detail, how the individuals are taxed (if at all) with respect to the net profits from this entity and what filing requirements they will each have with the IRS (discuss only for the entity you have recommended).
Discuss how Penelope, Mark and John will calculate their “basis” in the new entity. Be sure to include the impact that debt has on basis, if any (discuss only for the entity you have recommended).
Regarding limited liability, discuss the exposure that Penelope, Mark, and John’s personal assets will have to the debts and lawsuits of the entity you have recommended (discuss only for the entity you have recommended).
Conclude why entity selection is important to a newly forming business.
Guidelines
Restate the facts provided in the scenario.
Provide responses to each issue based on your recommendation.
Write a 1,400–1,500-word paper in APA format (double-spaced, with 12-point Times New Roman font and 1-inch margins).
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.